'This Week' Transcript: Geithner

July 25, 2010

Page 10 of 17

ROBERTS: ... look, it's obviously not just an economic question.
It's a political question. And -- and who gets to frame it? Do the
Democrats get to say the Republicans claim that they're against the
deficit, but they want to keep in all these tax cuts for those really
rich people, including those Wall Street bankers who got those huge
bonuses, or do the Republicans say, look, here are Democrats going at
you again, raising your taxes just so they can -- just so they can raise
that spending, because they want the government to take over every --
every part of American life?

And I think that's a lot of what this debate will be framed around
and what this election will be framed around.

TAPPER: And this debate comes as Ben Bernanke, the Fed chair, is
calling the economic outlook unusually uncertain, which is chilling
words for some people.

ROBERTS: Including the market. I mean, he said those words and 200
points down.

DONALDSON: The market is beginning to start to levitate again,
maybe unwisely, but Europe has produced better numbers just this past
week. The earnings season looks really good for some of the big
companies, not just the banks, but some of the companies, Caterpillar,
some of the people who make things. I think we're going to come out of it.

HAYES: But the numbers are mixed. I mean, that's the rosy scenario.

(CROSSTALK)

HAYES: The numbers are mixed, and there are plenty of numbers that
are pointing in the other direction. I think if you look at the big
picture, the question I think facing -- facing sort of everybody in
Washington right now with respect to the tax cuts, one of the things
that surprised me most about your interview with Tim Geithner was that
he said raising taxes on the wealthiest Americans won't have a negative
effect on growth, that was a stunning statement to me.

I think you could poll 1,000 economists and find very few of them
who would agree with what Tim Geithner just said, and one of those
people is Christina Romer in the White House, who has written before
about the negative effects of tax cuts, and, in fact, has an article...

(CROSSTALK)

ROBERTS: Of tax increases.

HAYES: ... of tax increases, and has an article in the current
American Economic Review, June 2010, in which she says tax increases
have a large and substantial negative effect on consumption and growth.

ROBERTS: Now, they have to be really especially careful about the
estate tax, however, because...

DONALDSON: There is none.

ROBERTS: Well, there isn't one at the moment.

TAPPER: There's not right now. And the heirs of George
Steinbrenner are happy for that.

ROBERTS: Exactly. So then if they bring it back, they'd better do
it overnight, you know, so that people aren't doing in their parents in
anticipation.

TAPPER: Donna, you wanted to say something?

BRAZILE: Everyone is concerned about the deficit, and that's why we
have to be careful how we frame this. I mean, you and I both know that
-- Stephen, that over the last 10 years we've seen the top 1 percent,
their incomes have grown. Meanwhile, the bottom half of the country,
the bottom half of all income earners, they've seen their wages stagnate.

So I think the president needs to be wise enough to take a look at
the entire array of tax cuts that he could provide to small businesses
and middle-income individuals that will help spur economic growth.